Spending rolls on, but inflation hitting West Aussies’ hip pockets

27 July 2022

A Bankwest Spend Trends analysis of the past financial year has revealed that Western Australians continue to spend on discretionary sectors, despite financial pressures from inflation, COVID, and fuel supply issues.

Bankwest looked at WA customer credit and debit transactions for FY22 (Jul 21-Jun 22) and compared spending to FY21 (Jul 20-Jun 21) to provide insights into the community’s response to changing economic conditions.

The figures showed that, despite the rising cost-of-living, Western Australians increased their spending in discretionary sectors in June, the final month of the financial year, compared to the previous month of May.

The month-on-month analysis showed no signs of spending slowing, with Airlines (10% volume; 9% value), Travel Agencies (11%; 11%), Hotels/Motels (7%; 16%), Department Stores (8%;12%), and Recreation (10%; 11%) all up.

However, the cost of that spending was clear when looking at the data across the entire financial year.

The financial year comparison highlighted the impact of inflation, with the overall value of transactions outpacing the volume (12% v 7% from FY21 to FY22), showing customers were paying more for their standard spending.

It was a trend that was more prominent in particular sectors, with customers paying more at Clothing Stores, which fell by two per cent in volume from FY21 to FY22 yet grew in value by 10 per cent, and Food Stores/Warehouses.

The most significant evidence of inflation, combined with global fuel supply issues, was at the bowser, with the volume of transactions increasing by 11 per cent, but the value surging by 34 per cent, hitting hip pockets hard.

Inflation also appeared to wreak havoc on customers’ attempts to prioritise spending, with a significant contraction in transaction volumes at Electrical Retailers (-22%) offset by a seven per cent spike in the value of spending.

The health and wellbeing impacts imposed by COVID also showed up in the data, with spending at Pharmacies soaring across the two financial years, increasing by 18 per cent in volume and 25 per cent in value.

The effects of the global pandemic were also potentially behind a rise in Utility costs, which grew 17 per cent in volume and 16 per cent in value, as people spent more time at home, either due to work or travel restrictions.

Fewer opportunities to travel through the financial year also appeared to have customers shift spending priorities, with Department Stores (33% volume; 26% value) and Hardware Stores (14%; 16%) significantly up FY-on-FY.

The easing of health measures and restrictions across FY22 permitted community sport and recreation activities to resume, and the sector grew by nine per cent in transaction volume and 21 per cent in value compared to FY21.

However, it was the travel sector that emerged the biggest winner in FY22, with most industries linked to tourism experiencing significant rebounds in spending from the previous financial year.

Airline spend increased 81 per cent in volume and 124 per cent in value as people returned to the skies, while Travel Agents (85%; 170%), Auto Rental (9%; 12%), and Hotel/Motel (12%;15%) industry spending also grew.

Bankwest General Manager Analytics Simon Lewis-Jones said: “Western Australians have been resilient throughout the global pandemic and, with new pressures emerging in costs of living, we’re again seeing spending habits evolve.

“This data is largely positive news for the business community, because even those sectors that have contracted in the volume of spending have either grown or remain stable in the value of spending by customers.

“However, that also highlights the inflationary pressures facing ordinary Western Australians, who are facing increasing costs across the board, even in those areas in which they attempt to rein in spending.

“The travel industry has recovered from the impacts of the first 24 months of the global pandemic but will undoubtedly require sustained levels of spending to rebuild their sense – and actual levels – of financial security.

“We believe challenging economic conditions may be here to stay for a while, so we encourage all customers to ensure they are in the best possible financial position and for those experiencing difficulties to get in touch."

Overall transaction change

Swipe
  Volume (%) Value (%)
FY22-v-FY21
+7
+12
Jun 21-v-Jun 22
+8
+17
Swipe

Focus on inflation

Top sectors (ex. Travel sector) by difference between transaction value and volume from FY21-FY22

Swipe
  Volume (%) Value (%) Differance (%)
Electrical appliances
-22
+7 +29
Service stations
+11
+34 +23
Recreation +9 +21 +12
Clothing stores -2 +10 +12
Other transport 0 +10 +10
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FY22-v-FY21 top 5 sectors by

Swipe

Biggest growth in volume
(%)

 

  Smallest growth in volume
(%)
  Biggest growth in value
(%)
  Smallest growth in value
(%)
 
Travel agencies
+85 Electrical appliances
-22 Travel agencies
+170 Repair shops
-18
Airlines +81 Interior furnishings
-5 Airlines
+124 Education -4
Department stores
+33 Repair shops
-3 Service stations
+34 Discount stores
0
Pharmacies
+18 Clothing stores
-2 Department stores
+26 Interior furnishings
+2
Utilities
+17 Sporting/Toy stores
-1 Pharmacies
+25 Professional svcs +3
Swipe

Jun 22-v-Jun 21 top 5 sectors by

Swipe

Biggest growth in volume
(%)

 

  Smallest growth in volume
(%)
  Biggest growth in value
(%)
  Smallest growth in value
(%)
 
Airlines
+174 Electrical appliances -29 Travel agencies +294 Repair shops -31
Travel agencies
+102 Repair shops
-5 Airlines +251 Electrical appliances
+2
Auto rentals
+21 Sporting/Toy stores
-3 Service stations
+37 Professional svcs
+3
Recreation +19 Discount stores
-1 Auto rental
+34 Discount stores +5
Other retail
+17 Vehicles
+1 Recreation
+27 Interior furnishings +7
Swipe

May 22-v-Jun 22 top 5 sectors by

Swipe

Biggest growth in volume
(%)

 

  Smallest growth in volume
(%)
  Biggest growth in value
(%)
  Smallest growth in value
(%)
 
Travel agencies
+11 Pharmacies
-4 Hotel/Motel +16 Sporting/Toy stores
-10
Recreation +10 Repair shops
-3 Auto rental
+15 Repair stores -6
Airlines
+10 Interior furnishings -2 Electric appliances +14 Pharmacies -5
Clothing stores
+8 Education
-1 Department stores
+12 Utilities
-4
Department stores
+8 Professional scvs
-1 Recreation
+11 Discount stores -2
Swipe

Sector examples

Swipe
Sector Examples
Airlines Self-explanatory
Auto rental Self-explanatory (general and commercial)
Clothing stores Single-brand stores, as opposed to multi-brand department Store retailers
Department stores Large department stores and chains, not including discount department stores
Discount stores Discount department stores and budget lifestyle and homeware retailers
Electrical appliance Whitegoods retailers, home entertainment stores, mobile and computing device outlets, computer games
Food stores/Warehouses Includes grocery stores, as well as wholesale food distribution warehouses
Hardware Hardware retailers and chains, landscaping specialists, home DIY retailers
Hotels/Motels Self-explanatory
Other retail Online marketplaces, online arms of bricks-and-mortar retailers, discount department stores, liquor stores
Other services Courier services, public administration, newspaper subscriptions, roadside assistance companies
Other transport Ride sharing companies, taxis, private and public paid parking
Pharmacies Self-explanatory
Professional services All types of insurance, waste disposal services
Quasi cash Casino and gambling activities
Repair shops Cobblers, tailors, electrical appliance repairs, watchmakers, mobile phone repairs
Restaurants/Bars Self-explanatory
Service stations Self-explanatory
Sporting/Toy stores Non-digital game retailers, outdoor recreation stores, sporting goods, apparel and footwear outlets
Travel agencies Self-explanatory (online and bricks-and-mortar)
Utilities Typical utility services, streaming services
Vehicles Automotive dealerships, automotive and car care accessory retailers, repairs and servicing
Swipe

About Bankwest
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